Schumer Tells Financial Firms to Disclose More on Climate Risk

(Bloomberg) -- Senate Minority Leader Charles Schumer and other top Democrats met with executives from some of the nation’s top financial institutions Friday and told them to do a better job of disclosing their risks related to climate change.

The meeting on the sidelines of the United Nations summit in New York comes amid growing concern about how the effects of climate change -- rising temperatures, sea level rise, water shortages, and more frequent extreme weather patterns -- will affect companies, their assets, and supply chains.

Executives from the companies, which included Citigroup Inc., insurer TIAA and credit rating firms S&P Global Inc. and Moody’s Corp. agreed they would try to do more to get private and government agencies “to be bolder in terms their requirements for disclosure and risk,” said Schumer, a New York Democrat.

“They understood they need to do more,” Schumer said.

Nearly half of the 600 largest U.S. companies still do not disclose decision-useful information on climate-related risks, according to Ceres, a corporate sustainability advocacy group that successfully pushed the Securities and Exchange Committee to issue the first-of-its-kind climate disclosure guidance in 2010.

“These risks are not something that will happen in the future, it’s already happening,” Senator Brian Schatz of Hawaii, who leads a special climate change panel set up by Democrats. “All of the players in our financial system will be effected by the economic risks around climate.”

Global economic losses related to natural disasters have reached an annual $160 billion and a report by a U.N. climate change panel warned of $54 trillion in damages to the global economy by 2100 -- even if the world limits average global temperature rise to no more than 1.5 degrees Celsius.

“Rising temperatures and shifting precipitation patterns will affect agricultural production and universally hurt worker health and productivity,” Moody’s Analytics said in a recent report. “More frequent and intense extreme weather events will increasingly disrupt and damage critical infrastructure and property. And sea-level rise will threaten coastal communities and island nations.”

Moody’s has also said the U.S., auto, shipping, and rail companies could face a credit rating downgrade in the next 3 to 5 years because of climate risks, according to Schatz.

To contact the reporter on this story: Ari Natter in Washington at anatter5@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Elizabeth Wasserman

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